N.J. Expands Agent Base

Marking the reported continued progress made to reform auto insurance, New Jersey Governor James McGreevey this week welcomed the decision by Allstate New Jersey to expand the number of agents writing auto insurance. Joined by Banking and Insurance Commissioner Holly Bakke, the Governor noted that the move serves as a confirmation that recently signed auto insurance reforms are working to the benefit of consumers.

“More agents translates into more places for drivers to find auto policies,” Governor McGreevey said. “It’s expected that over the next year, at least 20,000 more drivers will have easier access to auto insurance than they have today.”

Allstate New Jersey, the state’s second-largest auto insurance carrier, announced the appointment of five new exclusive agents and one independent agent to write auto, property and financial services products. These are the first new increases in sales offices since 1975, according to the Department of Banking and Insurance.

This fall, Allstate New Jersey also plans to open four more exclusive agent offices as well as grant auto-writing authority to a group of independent agents who currently write life-insurance only for Allstate New Jersey. This will expand the number of sales offices for auto insurance, marking a shift from the business strategy that Allstate New Jersey and many other New Jersey insurance companies

Less than three months ago, on June 9, 2003, Governor McGreevey signed into law a landmark reform package that aimed to boost competition and consumer choice in the auto insurance market. The new law, passed in response to a crisis that forced drivers to hunt for up to a month for auto insurance, takes aim at uninsured motorists and fraud, stops making good drivers pay for bad drivers, and gives consumers new rights and tools for finding the best policy for their needs.

Earlier this month, the reform package attracted major national carrier, Mercury General, to New Jersey. The company is in the process of appointing 50 new agents. Commissioner Bakke also credits the reform package for persuading the AIG companies to choose defer their option to leave the state at the end of 2003.

Bakke noted that Allstate’s decision to expand its agent force reverses a decades-long business plan of reducing the number of neighborhood agencies. “Other than a limited, national experiment with independent agents in 1999, Allstate had not expanded the number of auto agents in a generation,” Bakke noted. “We are making auto insurance more available to New Jersey consumers – and they will be able to see that change in their neighborhoods.”

Allstate’s expansion will bring auto insurance offices reportedly to areas where population shifts have made policies especially hard to find. Appointments in Marmora and Mays Landing, for example, bring distribution points to counties that have reportedly generated a disproportionate number of phone calls to the Department from drivers who cannot find auto insurance.

Bakke has talked to some of these callers during a session in the DOBI call center. “In an hour, I talked to two consumers who were moving permanently from Pennsylvania to their summer homes in Cape May County. They couldn’t understand why it was so difficult to find auto insurance in New Jersey, when across the river they could walk into an agent’s office and walk out with a policy.”

Allstate’s decision shows that companies are viewing New Jersey differently, according to Governor McGreevey. “We promised that our reforms would make companies reach out to consumers, not run from them. It’s working. We promised that we would put consumers in the driver’s seat, and we are.”

Richard Crist, Jr., president of Allstate New Jersey, said, “The New Jersey Auto Insurance Competition and Choice Act is energizing the company. It ensures strong consumer protection while encouraging and generating more competition and choice for New Jersey drivers. Reform is a big win for consumers.” Crist continued, “Our agents and sales force are looking ahead with focus and optimism; we’re upbeat about the possible opportunities resulting from the reform,” he said. “This attitude is also shared by the new exclusive agents – customer-oriented, dedicated and forward-thinking professionals – who are bringing new energy into Allstate New Jersey.”